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Compute the present value of $5,800 paid in two years using the following discount rates: 7...

Compute the present value of $5,800 paid in two years using the following discount rates: 7 percent in the first year and 6 percent in the second year. (Do not round intermediate calculations and round your answer to 2 decimal places.)

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Answer #1

Present value:

= Future value/((1+r1)*(1+r2))

= $5,800/((1+7%)*(1+6%))

= $5,113.74

Hence, present value is $5,113.74

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